Crypto exchange Kraken plans to offer trading in US-listed stocks

London – Kraken plans to offer trading in US-listed stocks and exchange-traded funds (ETFs), marking the 12-year-old company’s first foray outside its cryptocurrency roots.

Kraken will initially offer trading in the United States and Britain through a service built by a new division called Kraken Securities, according to a person with knowledge of the matter.

It already holds the required regulatory permits in Britain and has applied to the Financial Industry Regulatory Authority for a broker-dealer licence in the US, the person said.

The company is targeting a 2024 launch for the new service, according to the person.

Founded in 2011, Kraken is one of the oldest names in crypto and it has survived several bear markets – including the one in 2022 that saw companies from FTX to Celsius Network implode. Its push into equities comes almost two years after Bitcoin peaked at close to US$69,000, giving way to a “crypto winter” that has dimmed the industry’s allure and sapped volumes.

Kraken chief executive officer Dave Ripley’s move into equities is far from a sure-fire bet. It will bring the company into a crowded market of zero-commission players such as Robinhood Markets and Public.com. It also comes after the frenzy of retail trading unleashed by the Covid-19 pandemic has largely fizzled out. Public.com expanded into Britain in July, while Robinhood plans to launch brokerage services to individuals in the country in 2023.

After stock trading over Kraken goes live, eligible customers will be prompted to activate the service. Those who do so will see their portfolio of crypto, stocks and ETFs presented as a single balance, the person familiar with the situation said.

FTX.US announced in May 2022 that it would start offering stock trading. The exchange was wiped out six months later as founder Sam Bankman-Fried’s wider FTX Group imploded.

Kraken is also building up its prime brokerage services and is launching a qualified custodian for institutional clients in the coming weeks, according to a person familiar with that effort. The custody service will be run separately from the exchange and Kraken has applied for approval to the state of Wyoming, the person said.

Kraken has taken market share in 2023 even as trading volumes have dropped. The gains have come in large part at the expense of market leader Binance, which was founded six years after Kraken and has been hit by a crackdown from regulators around the world this year. At 3.5 per cent, Kraken’s share of global spot trading is the highest since 2018, according to CCData. BLOOMBERG